School district audit reveals few surprises

Terry Webster

Tuesday, Nov. 16, 1999 | 9:41 a.m.

Clark County School District officials were nonchalant Monday in response to an independent audit report that cites issues ranging from cash management to Year 2000 computer compliance.

That's probably because the areas of concern came as no surprise, according to Walt Rulffes, the district's chief financial officer.

"These are areas we asked them (the auditors) to look into," he said.

The 16-page report, prepared by Kafoury, Armstrong & Co. of Las Vegas, lists recommendations for improving internal controls.

One segment of the report addresses investments that are not fully backed by the U.S. government.

According to the district's own policy, only 49 percent of the investment portfolio may be invested in securities not guaranteed by the U.S. government. But about 60 percent of the Bond Purchase March 99 Portfolio was actually invested in this area.

Rulffes said this means the district invested $127 million in this area, rather than $104 million.

He added, "They weren't bad investments by any means."

The government would not assist in recovery in the event of a default on any investments it does not fully guarantee.

One way the district plans to address this area of concern is by presenting a candidate for the cash and investment manager position at the Dec. 9 School Board meeting. The position, which requires a high-level security clearance, has been vacant since last summer.

"It's one that we badly need," Rulffes said.

Under inventory control, the report states that when items can't be located, they are deleted from property records as "lost inventory." The auditing firm recommended the deletions be approved by a supervisor, which is not happening now.

Rulffes said he did not have a figure for the number of items that were reported missing or lost.

"Typically, we don't have things like copy machines or ovens disappearing," he said. "The items we have to watch are computers and audio visual equipment. If anything like that is missing, it's reported to the school police."

The report also contains a lengthy section concerning Year 2000 computer compliance.

Assistant Superintendent and Chief Technology Officer Philip Brody said the audit report, dated Oct. 8, is based on old information and all of the issues have been addressed.

The auditor who prepared the recommendations is out of town until next week, a spokeswoman at Kafoury, Armstrong & Co. said.

Superintendent Brian Cram said he doesn't feel the report, overall, points to any drastic problems.

The audit of the district's general purpose financial statements found the district's representation of its financial operations to be in order and in compliance with general accounting principles.